A retailer using a periodic inventory system returned $3,000 of defective inventory which was purchased on account from one of its wholesale suppliers.The entry to record this transaction on the retailer's books would include a debit to:
A) Accounts Receivable.
B) Cost of Goods Sold.
C) Accounts Payable.
D) Inventory.

Question

Quizplus · Accepted Answer

In a periodic inventory system, when inventory is returned, the retailer debits Accounts Payable to reduce the liability owed to the supplier.

A Retailer Using a Periodic Inventory System Returned $3,000 of Defective